Procurement Fraud in the IT Sector

TopShelf writes "IT staff usually enjoy unrivaled access to the deepest details of an organization's structure, and all too often, some submit to the urge to use that knowledge for nefarious purposes. Baseline Magazine explores how how Tech Insiders Cheat Their Employers, with examples of executives creating their own vendors to which fat contracts are awarded. Perhaps the most galling case involves a director in the New York City Chief Medical Examiner's office who is accused of scamming FEMA in the wake of the September 11, 2001 terrorist attacks."

not "Tech insiders" these are called "managers"

[OeLeWaPpErKe]

Obviously it's the "strategic decision makers" that pull this kind of crap.

Just my 2c

Re:Maybe I have a lack of knowledge...

[HTTP Error 403 403.9]

How does this qualify as fraud? If I have a day job with Company A and form my own LLC as Company B that sells product to A, isn't that perfectly fine? I could see it qualifying as a "conflict of interest" by A's standards, but otherwise I see it as a regular business transaction. I mean, I have seen tons of companies set up so that the same person manages one business that owns some piece of land on which his other business, an accounting firm, pays rent back to the first, and those transactions seem legal. In the example given, there was some interaction with working for and selling to the government, which I could see as illegal, but in all other cases with private organizations, I would say that things are fine. Does anyone have any details on the legality of this action?

From the article,"Typically, procurement fraud involves an employee working with an outside vendor to defraud his employer through bogus or inflated invoices, services and products that are not delivered, work that is never done or contract manipulation."

Re:You have to trust your people

[nuckfuts]

> Singling out IT managers as potential sources of fraud is disingenuous. ALL managers have the potential for fraud, because they have the access and the authority to commit the crime.

You're missing one of the main points, stated clearly on the first page of TA:

"An information-technology manager with a larcenous bent is uniquely qualified to carry out clandestine procurement activities. Not only do some corporate I.T. budgets top $1 billion, but the head of information technology oftentimes has the most complete access to the company's inner workings and understands better than anyone else what alarms not to trip when absconding with funds from the corporate coffers."

Of course your oversite hasn't prevented you from being modded up as "Insighful".